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15 States With a "Marriage Penalty" in Their Tax Brackets

Of course, you marry for love...but the financial benefits of marriage are nice, too. Whether you're a newlywed or you've reached your golden anniversary, there are a number of money-saving advantages to being married: spousal Social Security benefits, lower insurance rates and the ability to contribute to your spouse's retirement savings, to name a few. But when it comes to federal and state taxes, there's a tax-law twist that can actually cost a married couple money--it's called the "marriage penalty."

A marriage penalty exists when a couple filing a joint return pays more income tax than they would if they were single. In its most common form, the possibility of a marriage penalty is triggered when, for any given tax bracket, the minimum taxable income for joint filers is less than twice the amount for single filers. As a result, when you combine each spouse's income on a joint return, it can push some of that income into a higher tax bracket. This happens most often when the spouses' incomes are similar. For example, two taxpayers each with $100,000 of taxable income in Minnesota would be in the 7.85% tax bracket and pay a total of about $15,700 in state income taxes if filing individually. But as a couple, their combined taxable income of $200,000 pushes them into the state's 9.85% tax bracket, where their total Minnesota income taxes will be about $19,700--a penalty of $4,000 for filing jointly. (A marriage penalty can also be caused by other imbalances in the tax law, such as standard deductions, exemptions or credit phase-out thresholds for married couples that are less than twice the amount for single filers.)

The tax-bracket marriage penalty isn't a huge problem on the federal level anymore. Thanks to the 2017 tax-reform law, only the top federal income tax bracket (37% rate) contains the marriage-penalty trap. However, the marriage penalty is alive and well in several states. So, before you tie the knot or plan on moving to a new state, check to see if you're at risk of paying more in state income taxes as a married couple. To help you out, here are the 15 states (listed alphabetically) where the marriage penalty exists. Plan ahead if you currently live in or plan to relocate to one of these states.

California

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Lowest Tax Rate: 1%

Highest Tax Rate: 13.3%

Brackets with Marriage Penalty: 2 of 10

GO TO CALIFORNIA'S FULL STATE TAX PROFILE

Only upper-income couples need to worry about a potential marriage penalty in the Golden State, since the California penalty only strikes couples falling into the state's two highest income tax brackets. And the only reason the marriage penalty pops up

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